Friday, June 11, 2010

I just saw a link on yahoo news titled "The 5 dumbest things people can do when they owe too much money". I clicked the link but it was broken. I could probably guess what the dumb things people do are.

Last weekend, John bought one of the new android phones. In his business, he uses the phone a ridiculous amount, so it makes sense for him to have every tool.

While we were in the store, a 30 something woman walked in with 3 young kids. She proceeded to buy one of the android phones, which costs some 300 bucks up-front, then you get a $100 mail in rebate.

She put the 300 hundred dollars on 3 different credit cards.

When I talk about the problems with the economy, and some of my concerns about what may be inevitable, I picture that woman as completely fucked. Both John and I have more liquid assets than we owe on mortgages. We own multiple properties in DF/W. We can buy cars with cash, but will finance if the rate is very, very low - like zero. Hey.. that's free money, and John loves to buy things with zero interest loans.

We try and protect ourselves so that no matter what the economy does, we'll be okay. There are some things we really can't control. We can get fucked by a health insurance company. Speaking of which, the insurance company John has keeps denying the claims for the lab work that was done when he had his heart attack. They don't have a valid reason to deny the claims.. they just keep doing it, and when you call them to bitch, they tell us to resubmit the claims.. and then they deny them again.

This is a typical tactic of the health insurance companies that the Loon Brigade loves so much. They fuck with you, and hope that you don't have the resource to sue them for a massive judgment. Fortunately, we do. Many other people get royally screwed and have no recourse. This is what the Republicans and the Loon Brigade want to continue.

Getting back to cars... I still read a Nissan 370Z forum regularly. Still have my eye on one. I keep seeing kids in their 20's buying the car.. at upwards of $40k. It's a huge mistake to do that, but they don't care. They have to have the car.

In my 20s, I drove the same piece of shit 1978 Mustang II... for 7 years. There is a reason to deny yourself what you want if you don't have ample cash. You plan for your future.. and put yourself in a position where you can buy things that you want, and not ruin your finances doing it.

The number of people that are smart financially is very, very low. I worry about them a lot. I can't imagine how they deal with the stress. John and I are both the types that would have a mental break down if we didn't have 7 figures + in the bank. We have friends who are getting their house foreclosed on and are having to move into an apartment.. with their kids. How are they going to pay for college? How can they sleep at night?

I don't understand how people can live on the edge and not go mad. It's not some elitist attitude. It's sacrificing a bit when you're younger, and doing the right things so when you hit your 40's, you're making a nice income to set yourself up for some peace of mind.